Bitcoin City 🌆
- Bitcoin City will be situated at the foot of a volcano in El Salvador and will be powered by the volcanos. The city will have no CO2 emissions
- It will actually be a fully functioning city, equipped with an airport, housing, commercial real estate and etc.
- There will be no income, capital gains, property, payroll, or municipal taxes in Bitcoin city. Forever. The only taxation of a citizen would be a 10% sales tax
- But where will El Salvador get the money to build this citadel? This is where it gets interesting
Bitcoin Bond 💰
- El Salvador will be issuing a $1 billion dollar sovereign Bitcoin bond that will carry a 6.5% yield for investors
- $500 million of the proceeds will go towards building Bitcoin City, while the other $500 million will be invested in bitcoin
- But why would institutional bond investors invest in this bond when the current El Salvador bonds come due in 10 years have a yield of 13%?
- Because the bond will have a special dividend. If you think that Bitcoin will continue to go up, assuming 35% yoy, which is pretty conservative, then during the 10th year of the bond, the APY will be 140%
- If the demand for the bonds is like what we expected, you can bet that El Salvador will issue many more of them and other nation-states will hop on the bandwagon
A lot of people have criticized President Bukele for becoming a totalitarian. For example, he fired 1/3 of the country's top judges and changed the constitution to allow for consecutive re-election.
So what's my view on it?
I got to admit there's a lot of sketchy stuff going down there but seeing what happened in Malaysia, I honestly think that we need someone like Bukele, a Machiavellian in order to make some serious changes.
El Salvador has always been famous for the wrong reasons, i.e drugs, gang violence but now because of Bukele, they're finally getting noticed for something good. Because of Bitcoin, Salvadorians finally can have hope again, something we Malaysian are lacking.
Bitcoin is hope. Bitcoin is a once in a lifetime bet. You can't get out of the rut and make it by playing nice.